Which one of the following statements concerning a proprietorship is true?
A) A proprietorship can be a business jointly owned by two family members.
B) Income from a proprietorship is taxed as a separate entity.
C) A proprietor is personally responsible for 100% of the firm's liabilities.
D) A partial transfer of ownership is easier with a proprietorship than with a corporation.
E) Income from a proprietorship is taxed at a lower rate than other personal income.

Question

Quizplus · Accepted Answer

A proprietorship, also known as a sole proprietorship, is a business owned by one person. The owner is personally liable for all the debts and obligations of the business. This means that if the business cannot pay its debts, creditors can go after the owner's personal assets. Unlike corporations, proprietorships do not have a separate legal identity from their owners, leading to unlimited personal liability for the proprietor.

Which One of the Following Statements Concerning a Proprietorship Is